retail news in context, analysis with attitude

The New York Post reports that Kroger “is exploring an alliance with Jack Ma’s Alibaba — the China-based e-commerce giant,” and that “senior Kroger executives met with senior Alibaba officials last month in China.”

According to the story, “The precise topics discussed at the meeting could not be learned, but one report said the two companies have already teamed up on a deal … to speed up the integration of online and off-line sales.”

NYU marketing professor Scott Galloway, author of “The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google,” tells the Post that he believes that any deal between the two companies “would involve two things, technology and capital, which Alibaba has in spades … Kroger has scant technology and relative to Amazon has scant capital.”

The Post story provides the following analysis: “Kroger wants to sell more general merchandise like rivals Amazon, Target and Walmart — and has struggled to launch its own home delivery service, analysts noted.

“Alibaba could provide to Kroger its Alipay platform to offer customers the chance to pay for goods through an app — something it already does in its stores in China.
Also, Kroger could direct customers to the Alibaba site, where they could buy general merchandise, a source said.

“Alibaba has been trying to increase its relatively small presence in America to better compete with Amazon on a global basis, sources said.”

Alibaba officials said that they meet with “hundreds of businesses around the world every day about expanding commercial relationships,” and that it would be a mistake to assign the Kroger meeting any special significance. Kroger execs did not comment on the reports of the meeting.
KC's View:
I have to imagine that the pace of change in retail these days is opening the doors to a lot of possible partnerships, alliances and even acquisitions that various parties never would have considered in earlier, simpler times. Everybody - or at least, the smart players - are looking for that game changing move, that secret sauce that will create the killer app, allowing them to get the upper hand, at least for awhile.

Could Alibaba and Kroger merge? I have no clue. But as I’ve said here before, I’m out of the “never” business.